The audit shows problems with the agency's two largest grants given to date - the clinical trials network and a $20 million commercialization grant awarded to M.D. Anderson and Rice University. For the M.D. Anderson-Rice grant, neither institution's proposal received scientific, due diligence or intellectual property reviews, the audit found.

The agency later rescinded the grant and decided that, once resubmitted, it will be evaluated by scientific and commercialization reviewers.

The audit also cites previously reported problems with an $11 million grant to a Dallas biotechnology firm that lacked proper review. And it criticized the fact that CPRIT's fund-raising foundation does not provide information about its donors to agency decision-makers, information without which CPRIT can't spot conflicts of interest.

"CPRIT's lack of controls for ensuring there are not any business and professional relationships between its peer reviewers and grantees impairs CPRIT's ability to assure the public that its award decisions are improperly influenced," the audit says.

The audit says CPRIT's management generally agreed with its recommendations.

CPRIT, also under criminal and civil investigations, agreed in December to stop issuing new grants until it can assure the public it has corrected widely reported problems involving bypassed procedures, conflicts of interest and a lack of transparency

The audit confirmed those problems.

Voters approved the creation of the $3 billion agency in 2007 and it began awarding grants in 2009. It has since allocated more than $800 million.